Help for savers as beer and bingo levies reduced
In an upbeat annual budget statement, Mr Osborne announced upgrades to official forecasts for the country’s economic growth, although stressing he would stick to his belt-tightening plans which will include a cap on welfare spending.
His help to savers, who have been hurt by near-zero interest rates, included an easing of requirements on pensioners to buy annuities and creation of government savings accounts which will pay above-market interest rates to people aged over 65. Shares in insurance firms fell on the announcement.
Shares in gambling firms also weakened on news of a new tax for the industry, even as Mr Osborne cut a levy on bingo.
Mr Osborne announced the latest in a series of increases in the how much people can earn before paying income tax. He also raised the threshold at which earners pay a tax rate of 40% for the first time since the 2010 election.
Treasury officials stressed the budget did not represent a relaxation of the government’s fiscal drive.
Forecasts by the Office for Budget Responsibility painted a picture of solid recovery with the economy set to grow 2.7% this year.
That was higher than a forecast of 2.4% made as recently as December and much higher than an estimate of 1.8% a year ago.
“That’s the biggest upward revision to growth between budgets for at least 30 years,” Mr Osborne said to cheers from members of his Conservative Party.
Growth in 2015, he said, was expected to be 2.3%, up slightly from December’s forecast for 2.2%.
Mr Osborne also announced a doubling of a tax break for firms that invest and measures to help bring down electricity bills.
The improved outlook shaved £24bn (€28.7bn) from the official forecasts for Britain’s huge budget deficit over the next few years.
To help keep Britain on track with its plan to get rid of the deficit by the 2018/19 fiscal year, Mr Osborne said the government will cap the amount of money it spends each year on welfare at £119bn in the 2015/16 fiscal year.
With an eye on Scotland’s referendum, he announced new tax breaks for investment in North Sea oil and gas production and took a swipe at Scottish nationalists, noting how their estimate of the value of the remaining reserves are worth had fallen further behind those of the OBR.
The chancellor also froze duties on whisky and other spirits, a move which is likely to be welcomed by Scottish distilleries.
